12e_TB_Chap_1

Chapter 01 Strategic Management Management Multiple Choice Questions

1. (p. 3) Which of the following is an element of a firm's remote external environment? A. Competition B. Suppliers C. Government agencies D. Economic and social conditions

 Difficulty: Easy  Learning Objective: 1

2. (p. 3) Which of the following is NOT a part of a firm's immediate external environment? A. Technological development B. Competitors C. Suppliers D. Government agencies

 Difficulty: Easy  Learning Objective: 1

3. (p. 3) The immediate external environment includes: A. Competitors B. S. B. U. s C. Divisions D. Management

 Difficulty: Easy  Learning Objective: 1

4. (p. 3) The _______ comprises economic and social conditions, political priorities and technological developments, all of which must b e anticipated, monitored, assessed and incorporated into the executive's decision making. A. Remote external environment B. Task environment C. Operating environment D. Internal environment

 Difficulty: Easy  Learning Objective: 1

5. (p. 3) The set of decisions and actions resulting in the formulation and implementation of   plans designed to achieve a company's objectives is defined as: A. Strategic policy B. Business policy C. Strategic management D. Tactics

 Difficulty: Medium  Learning Objective: 2

6. (p. 3) Strategic management compromises nine critical tasks. Which of the following is NOT one of the tasks? A. Development of annual objectives compatible with grand strategies B. Assessment of the company's external environment C. Selection of a particular set of long-term objectives and grand strategies D. Evaluate the success of the strategic process

 Difficulty: Medium  Learning Objective: 2

7. (p. 4) Strategic management involves the _____, directing, _____ and controlling of a company's strategy-related decisions and actions. A. Financing; marketing B. Planning; financing C. Marketing; planning D. Planning; organizing

 Difficulty: Medium  Learning Objective: 2

8. (p.4) Large-scale, future-oriented plans, for interacting with the competitive environment to achieve company objectives refers to its A. Strategy B. Goals C. Competitive analysis D. Dynamic policies

 Difficulty: Easy  Learning Objective: 2

9. (p. 4) A strategy is a company's A. Game plan B. Pricing policy C. Value statement D. Long-term objective

 Difficulty: Easy  Learning Objective: 2

10. (p. 4) A(n) _____ reflects a company's awareness of how, when and where is should compete, against whom it should compete and for what purpose it should compete. A. Vision B. Organizational structure C. Strategy D. Long-term objective

 Difficulty: Medium  Learning Objective: 2

11. (p. 4) Strategic issues require which level of management decisions? A. Operative B. Top C. Front-line D. Middle

 Difficulty: Easy  Learning Objective: 2

12. (p. 5) Strategic decisions ostensibly commit the firm for  A. 1-2 years B. The short term C. 3-4 years D. A long time, typically five years

 Difficulty: Medium  Learning Objective: 2

13. (p. 4-5) Some business decisions are strategic and therefore deserve strategic management attention. Which of the following is one of the six strategic issue dimensions? A. Requires front-line employee decisions B. Is not likely to have a significant impact on long-term prosperity of the firm C. Necessitates considering factors in the firm's external environment D. Is spontaneous

 Difficulty: Medium  Learning Objective: 3

14. (p. 5) Which of the following applies to strategic issues? A. Consider only the firm's internal environment B. Are future oriented C. Concern allocation of insignificant amounts of company resources D. Do not have long-term impact on the firm's prosperity

 Difficulty: Easy  Learning Objective: 3

15. (p. 5) Strategic decisions are based on what managers _____, rather than on what they  _____. A. Forecast; know B. React to; anticipate C. Know; forecast D. Compromise with; analyze

 Difficulty: Hard   Learning Objective: 3

16. (p. 5) In a turbulent and competitive free enterprise environment, a firm w ill succeed only if  it takes a(n) ____ stance towards change. A. Reactive B. Anti-regulatory or anti-government C. Proactive D. Vision and not mission

 Difficulty: Medium  Learning Objective: 3

17. (p. 6) Typically how many strategic decision levels are in th e corporate decision-making hierarchy? A. 5 or more B. 4 C. 3 D. 2

 Difficulty: Easy  Learning Objective: 4

18. (p. 6) To a large extent, attitudes at the corporate level reflect the concerns of  A. Stockholders and society at large B. Top managers C. The CEO D. The federal government

 Difficulty: Medium  Learning Objective: 4

19. (p. 6) The top of the decision-making hierarchy comprises all of these EXCEPT A. Board of directors B. Front-line managers C. The CEO D. Administrative officers

 Difficulty: Easy  Learning Objective: 4

20. (p. 6) In a multi-business firm, ______ -level executives determine the businesses in which the firm should be involved. A. Business B. Functional C. Corporate D. Operative

 Difficulty: Medium  Learning Objective: 4

21. (p. 6) At Office Supply, Inc., ____ -level managers would be responsible for determining whether the company should be involved in home furnishings or electronic appliance  businesses, where as ____ -level managers would be responsible for determining how the firm will compete in the selected product-market arena. A. Business; corporate B. Corporate; functional C. Functional; business D. Corporate; business

 Difficulty: Hard   Learning Objective: 4

22. (p. 6) In the middle of the decision-making hierarchy is the _____ level. A. Corporate B. Functional C. Business D. Strategic

 Difficulty: Medium  Learning Objective: 4

23. (p. 6) Who determines the basis on which a company can compete in the selected productmarket arena? A. Functional-level strategic managers B. Corporate-level strategic managers C. Business-level strategic managers D. Operational managers supervising operative

 Difficulty: Medium  Learning Objective: 4

24. (p. 6) Which of these managers tries to identify and secure th e most profitable and  promising market segment? A. Functional managers B. Corporate managers C. Business managers D. Operative

 Difficulty: Medium  Learning Objective: 4

25. (p. 6) The functional level of decision making is characterized b y: A. The board of directors deriving corporate goals B. Managers of product, geographic and functional areas C. The CEO developing a company profile D. Business managers interpreting the mission into operational objectives

 Difficulty: Medium  Learning Objective: 4

26. (p. 6) Which strategic level is typically responsible for developing annual objectives and short-term strategies? A. Functional level B. Corporate level C. Business level D. Board of Directors level

 Difficulty: Medium  Learning Objective: 4

27. (p. 6) Which of the following is NOT a level in the decision-making hierarchy of a firm? A. Business B. Corporate C. Operative D. Functional

 Difficulty: Medium  Learning Objective: 4

28. (p. 6) Functional managers are typically responsible for which of the following? A. Annual objectives B. Tactics C. Corporate goals D. Mission

 Difficulty: Medium  Learning Objective: 4

29. (p. 6) Whereas corporate and business-level managers center their attention on _____, managers at functional-level center their attention on ____. A. Operational issues; strategic issues B. Doing things right; doing the right things C. Entrepreneurial mode; adaptive mode D. Doing the right things; doing things right

 Difficulty: Hard   Learning Objective: 4

30. (p. 6) Decisions at which level of management tend to be more value-oriented and conceptual? A. Functional B. Corporate C. Operative D. Business

 Difficulty: Medium  Learning Objective: 4

31. (p. 7) Dividend policies are decided at the A. Corporate level B. Business level C. Functional level D. Operational level

 Difficulty: Medium  Learning Objective: 4

32. (p. 7) Which level of decisions encompasses greater risk, cost and p rofit potential? A. Business B. Lower echelon C. Corporate D. Functional

 Difficulty: Medium  Learning Objective: 4

33. (p. 8) Corporate-level decisions are characterized by: A. Decreased risk  B. Doing things right C. Short-time horizons D. Greater profit

 Difficulty: Hard   Learning Objective: 4

34. (p. 7) Decisions concerning plant location, distribution channels, geographic coverage and market segmentation are typically made at: A. The corporate level B. The business level C. The functional level D. The front-line operational level

 Difficulty: Medium  Learning Objective: 4

35. (p. 8) The degree to which participation, responsibility, authority and discretion in decisionmaking are specified is called: A. Informality B. Formality C. Functional tactic D. Dynamic mode

 Difficulty: Medium  Learning Objective: 4

36. (p. 8) Which of these is usually positively correlated with the cost, compreh ensiveness, accuracy and success of planning? A. Greater formality B. Functional structure C. Organizational matrix D. Functional tactics

 Difficulty: Medium  Learning Objective: 4

37. (p. 8) According to Henry Mintzberg, very large firms typically use the _____ mode of  strategic management. A. Adaptive B. Entrepreneurial C. Informal D. Planning

 Difficulty: Medium  Learning Objective: 4

38. (p. 8) Henry Mintzberg identified a mode which he associates with medium-sized firms in relatively stable environments. This is referred to as a(n) ____ mod e. A. Entrepreneurial B. Adaptive C. Business D. Planning

 Difficulty: Medium  Learning Objective: 4

39. (p. 8) Firms that are basically under the control of a single individual and produce a limited number of products/services are referred to as following ______ mode. A. Entrepreneurial B. Intrapreneurial C. Managerial D. Corporate

 Difficulty: Medium  Learning Objective: 4

40. (p. 8) The informal, intuitive and limited approach to strategic mana gement associated with owner-managers of smaller firm refers to the ____ mode of formality, according to Mintzberg. A. Entrepreneurial B. Functional C. Planning D. Adaptive

 Difficulty: Easy  Learning Objective: 4

41. (p. 8) The planning mode refers to the A. Strategic formality associated with the large firms that operate under a c omprehensive, formal planning system B. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches C. Strategic formality associated with global firms that emphasize cultural value systems D. Informal, intuitive and limited approach to strategic management with owner-mana ger of  smaller firms

 Difficulty: Medium  Learning Objective: 4

42. (p. 8) According to Mintzberg, the adaptive mode refers to A. Strategic formality associated with the large firms that operate under a c omprehensive, formal planning system B. Strategic formality associated with medium-sized firms that emphasize the incremental modification of existing competitive approaches C. Strategic formality associated with global firms that emphasize cultural value systems D. Informal, intuitive and limited approach to strategic management with owner-manager of  smaller firms

 Difficulty: Medium  Learning Objective: 4

43. (p. 8) Which of these is NOT a mode of formality identified by Mintzberg? A. Adaptive B. Planning C. Functional D. Entrepreneurial

 Difficulty: Easy  Learning Objective: 4

44. (p. 9) The ideal strategic management team includes decision makers from A. All three company levels (corporate, business and functional) B. Just the functional level since they are closest to the customers C. Just the corporate and business levels given that the y focus on doing the right thing D. Just the top management since they understand the big picture

 Difficulty: Medium  Learning Objective: 4

45. (p. 8) Managers at the _____ level typically have principal responsibilities for developing environmental analysis and forecasting, establishing business objectives and developing  business plans prepared by staff groups. A. Corporate B. Functional C. Operational D. Business

 Difficulty: Medium  Learning Objective: 4

46. (p. 9) When the dominance of the CEO approaches autocracy, the effectiveness of the form's strategic planning and management processes are likely to: A. Enhance strategic planning but diminish its processes B. Be greatly enhanced C. Have no effect D. Be diminished

 Difficulty: Medium  Learning Objective: 5

47. (p. 11) Which of these is NOT true about the behavioral effect of strategic management? A. Strategy formulation activities enhance the firm's ability to prevent problems B. Resistance to change is reduced C. Gaps and overlaps in activities among individu als and groups are increased to ensure the checks and balance D. The employee involvement is strategy formulation improves their understanding of the  productivity reward relationship in every strategy plan

 Difficulty: Hard   Learning Objective: 5

48. (p. 11) Managers must be trained to guard against all of the following types of unintended negative consequences of involvement in strategy formulation EXCEPT A. Managers must be trained to minimize the negative impact on operational responsibilities  by scheduling their duties to allow the necessary time for strategic activities B. Managers must be trained to limit their promises to performance that the decision makers and their subordinates can deliver  C. Managers must be trained to anticipate and respond to the disappointment of participating subordinates over unattained expectations D. Managers must be trained to disregard the productivity-reward relationship since strategy implementation makes it invalid

 Difficulty: Hard   Learning Objective: 5

49. (p. 11) Which of the following is a major function of the strategic management model? A. It helps make profits for the firm B. It helps in identifying key issues faced by the firm C. It helps in deciding which products to sell D. It depicts the sequence and relationships of the major components of the strategic management process

 Difficulty: Medium  Learning Objective: 5

50. (p. 13) Social responsibility is a critical consideration for a company's strategic de cision makers since A. Stockholders demand it B. The mission statement must express how the company intends to contribute to the societies that sustain it C. It increases a company's profits D. It helps make decisions

 Difficulty: Medium  Learning Objective: 5

51. (p. 13) Analysis of the quantity and quality of the company's financial, human and physical resources is a part of  A. Internal analysis B. Mission statement C. External environment analysis D. Corporate goals

 Difficulty: Easy  Learning Objective: 5

52. (p. 13) The external environment consists of: A. The operating environment B. Managers C. Employees D. Owners

 Difficulty: Easy  Learning Objective: 5

53. (p. 13) Which one of the following is NOT an interactive segment of a firm's external environment? A. Functional B. Remote C. Industry D. Operating

 Difficulty: Medium  Learning Objective: 5

54. (p. 12) Description of the company's product, market and technological areas of emphasis is contained in the A. Assessment of the external environment B. Company profile C. Company mission D. Interactive opportunity analysis

 Difficulty: Easy  Learning Objective: 5

55. (p. 13) The results that an organization seeks over a multiyear period are its A. Generic strategies B. Grand strategies C. Mission statements D. Long-term objectives

 Difficulty: Easy  Learning Objective: 5

56. (p. 13) The doubling of EPS within 5 years with increases in each intervening year is called a(n): A. Long-term goal B. Long-term objective C. Short-term goal D. Short-term objective

 Difficulty: Hard   Learning Objective: 5

57. (p. 13-14) The difference between long-term and short-term objectives is principally: A. Greater attainability B. Greater flexibility C. Greater measurability D. Greater specificity

 Difficulty: Hard   Learning Objective: 5

58. (p. 14) Grand strategies include: A. Market turnaround B. Vertical diversification C. Conglomerate integration D. Concentric diversification

 Difficulty: Medium  Learning Objective: 5

59. (p. 14) Which of the following is an example of a grand strategy? A. Decentralization B. Policy making C. Conglomerate integration D. Innovation

 Difficulty: Hard   Learning Objective: 5

60. (p. 14) Long-term objectives are principally attained through: A. Annual goals B. Functional strategies C. Short-term goals D. Grand strategy

 Difficulty: Hard   Learning Objective: 5

61. (p. 14) The minimum equity position required for all new McDonald's franchises is an example of: A. A goal B. A procedure C. A policy D. An objective

 Difficulty: Medium  Learning Objective: 5

62. (p. 14) The general plan of major actions through which a firm intends to achieve is long term objectives is called its: A. Corporate plan B. Long-term goal C. Grand strategy D. Mission

 Difficulty: Easy  Learning Objective: 5

63. (p. 14) Broad, precedent-setting decisions that guide or substitute for repetitive or timesensitive managerial decision making are called A. Goals B. Strategies C. Objectives D. Policies

 Difficulty: Easy  Learning Objective: 5

64. (p. 13) Which of the following is a generic strategy option? A. Narrow margins B. Diversification C. Differentiation D. Retrenchment

 Difficulty: Medium  Learning Objective: 5

65. (p. 14) Horizontal integration is an example of a A. Generic strategy B. Grand strategy C. Functional level strategy D. SBU strategy

 Difficulty: Hard   Learning Objective: 5

66. (p. 14) Specific actions that need to be undertaken to achieve short-term objectives, usually  by functional areas, refers to A. Policies B. Formality C. Tactics D. Process

 Difficulty: Easy  Learning Objective: 5

67. (p. 14) Which of these refers to short-term, narrow scoped plans that detail "means" or  activities that a company will use to achieve short-term projects? A. Policies B. Formality C. Vision D. Functional tactics

 Difficulty: Easy  Learning Objective: 5

68. (p. 15) _____ is a critical stage in strategy implementation wherein man agers attempt to recast their organization. A. Continuous improvement B. Reengineering C. Strategic control D. Strategy formulation

 Difficulty: Medium  Learning Objective: 5

69. (p. 15) _____ is concerned with tracking a strategy as it is being implemented, detecting  problems or changes in its underlying premises and making necessary adjustments. A. Restructuring strategy B. Strategic control C. Internal analysis D. Functional tactics

 Difficulty: Easy  Learning Objective: 5

70. (p. 15) Which of these is a form of strategic control in which managers are encouraged to b e  proactive in improving all operations of the firm? A. Continuous improvement B. Adaptive mode C. Functional tactics D. Planning mode

 Difficulty: Easy  Learning Objective: 5

71. (p. 16) A flow of information through interrelated stages of analysis toward achievement of  an aim is: A. A process B. A procedure C. A policy D. A system

 Difficulty: Easy  Learning Objective: 5

72. (p. 16) Influential individuals and groups that are vitally interested in the actions of the  business are called A. Stockholders B. Stakeholders C. Strategists D. Customers

 Difficulty: Easy  Learning Objective: 5

73. (p. 16) Strategic formulation and implementation of a plan are: A. Sequential B. Simultaneous C. Random D. Reversible

 Difficulty: Medium  Learning Objective: 5

74. (p. 16) Strategic management processes need which of the following to enhance future decision making? A. Testing B. Feedback  C. Discontinuity D. Projecting

 Difficulty: Hard   Learning Objective: 5

75. (p. 17) The strategy management process is: A. Stationary B. Dynamic C. Static D. Radical

 Difficulty: Hard   Learning Objective: 6 

Essay Questions

76. Define strategic management. Identify any five of the nine critical tasks of strategic management? Please refer to discussion on "The Nature and Value of Strategic Management" on page 3.

 Learning Objective: 1

77. Strategic issues have several key dimensions. Briefly describe any four of them? Please refer to the discussion on "Dimensions of Strategic Decisions" on page 4-5.

 Learning Objective: 2

78. Describe the three levels of strategy in a n organization. Provide an example of each? Please refer to the discussion on "Three levels of Strategy" on pages 5-6.

 Learning Objective: 4

79. With regards to the levels of strategy, comp are and contrast single-business firms versus multiple-business firms? Please refer to Exhibit 1.3 on page 7.

 Learning Objective: 4

80. Describe the three different modes of formality, according to Mintzberg? Please refer to discussion on "Formality in Strategic Management" o n pages 8-9.

 Learning Objective: 4

81. Discuss the benefits and risks of strategic management? Please refer to the discussion on "Benefits and Risks of Strategic Management" on pages 910.

 Learning Objective: 5

82. Define and briefly describe any five components of the strategic management model? Please refer to the discussion on "Components of the Strategic management Model" on pages 12-15.

 Learning Objective: 5

83. Differentiate between generic and grand strategies? Please refer to the discussion on "Generic and Grand Strategies" on page s 13-14.

 Learning Objective: 5

84. Define strategic control. Give an example of strategic control from a managerial  perspective? Please refer to the discussion on "Strategic Control a nd Continuous Improvement" on page 15.

 Learning Objective: 5

85. What implications can be drawn from viewing strategic management as a process? Explain? Please refer to the discussion on "Strategic Management as a Process" on page 15-16.

 Learning Objective: 6